On Friday, gold remained near previous day's trading levels, as its decline was stopped by the 55, 100 and 200-hour simple moving averages near the 1,405.00 level.
In general, the SMAs were expected to push the metal's price up.
The Federal Reserve released the US FOMC Meeting Minutes data, where the US policymakers provide in-depth insights into the economic and financial conditions that influenced their vote on where to set interests rates.
According to the official release: "Investors' concerns about downside risks to the economic outlook weighed on financial markets over the intermeeting period. Market participants cited negative news about international trade tensions and, to a lesser extent, soft U.S. and foreign economic data as factors that contributed to these developments.
Nominal Treasury yields posted notable declines and the expected path of policy shifted down considerably over the period. Equity prices declined, on net, and corporate bond spreads widened. However, financing conditions for businesses and households generally remained supportive of economic growth."
On Friday, the US Producers Price Index will be released at 12:30 GMT.
For more information watch this week's Economic Calendar Analysis
XAU/USD short-term forecast
Yesterday, the XAU/USD exchange rate declined to the support level formed by the 55-, 100– and 200-hour SMAs, located circa 1405.00. During Friday's morning, the rate was testing the given support.
If the given moving averages hold, it is likely, that gold could remain to appreciate against the US Dollar. In this case, a possible upside target is the psychological level at 1,420.00.
Otherwise, it is expected, that the price for could continue to decline. Potential downside target is the lower boundary of the short-term ascending channel located circa 1,392.00.
Hourly Chart
On the daily chart, it can be observed that the metal still remains below the August 2013 high level, which stopped the metal's massive June surge.
Daily Chart
Traders increase short position amount
Since the middle of Monday's London trading session, 55% of open position volume on the Swiss Foreign Exchange was in short positions.
The sentiment changed on Thursday, as 60% of open position volume was in short positions. Long traders had taken profit and some have opened short positions in the expectations of a decline.
By the middle of Friday, the trend continued, as already 67% of volume was short.
Meanwhile, in the 1000 base point range around the current metal's price the orders were bullish - 61% of orders were set to buy.